Practices
High-Stakes Bankruptcy Matters
We represent debtors, non-institutional creditors, and fiduciaries in bankruptcy and insolvency matters, in and out of court. Our work includes restructurings, contested proceedings, and related commercial disputes, with clear strategy and practical execution. We are a results-oriented practice.
In nearly twenty years of representations corporations, individuals, and other constituencies in bankruptcy cases, we have developed special expertise in a wide number of bankruptcy practice areas.
Our clients include venture-funded corporations as well as small businesses and individuals. Our effectiveness is enhanced by this breadth of experience and our capability in virtually all aspects of chapter 11 cases, including asset sales and asset purchases, as well (private) out-of-court workouts.
Chapter 11, Asset Purchases, & Out-of-Court Workouts
We have one of the most highly regarded bankruptcy practices in the San Francisco Bay Area. We are experienced in representing all of the major constituencies in bankruptcy proceedings and out-of-court workouts, with a focus on debtors, non-institutional creditors, asset purchasers, and third-party plan proponents.
Chapter 11
When informal, consensual restructuring isn’t practical or doesn’t succeed, a company may file for Chapter 11 in the Bankruptcy Court. Chapter 11 is designed to produce a plan of reorganization — or a structured liquidation — that a majority of creditors will accept, either preserving the enterprise and restructuring its debt or liquidating assets in a way that maximizes recoveries. Chapter 11 is most often used by businesses, but individuals may use it in some circumstances.
A Chapter 11 case begins with the filing of a petition, which triggers an automatic stay halting creditor enforcement against the company’s assets. This gives the company breathing room to negotiate with creditors, restructure operations, address cashflow, and develop a reorganization plan. Throughout the case, the company must follow Chapter 11’s rules on asset management, disclosure of assets and liabilities, and Court approval of sales and other actions outside the ordinary course of business. A creditors’ committee is often appointed to represent unsecured creditors.
The debtor continues to operate its business while negotiating a plan to restructure its obligations. The plan may provide for asset sales, debt conversion or reduction, operational changes, or termination of burdensome leases and contracts. Creditors vote by class, and confirmation requires acceptance by the prescribed majorities — but the plan can be confirmed without unanimous consent once those thresholds are met. On the effective date, all prior obligations are discharged except as preserved or created by the plan, giving the company a “fresh start.”
Chapter 11 is a complex process demanding careful analysis, planning, and execution — and a well-developed exit strategy before filing. Experienced counsel is essential to protect the rights of debtors and creditors alike. Belvedere Legal, P.C. brings extensive experience representing both companies and individuals in Chapter 11 and can provide that protection.
Asset Purchases
We have represented debtors, creditors, and third-parties in the following areas:
- Counseling as to strategic factors affecting transaction structure
- Due diligence and support
- Assistance in sale process selection
- Development and negotiation of Bankruptcy Code section 363 asset sale procedures
- Transitional financing of the target company
- Addressing the need for management or other transitional services
- Identification and avoidance of unwanted seller and insolvency-related liabilities
- Retention and incentive programs for key employees of the target company
- Choice of business entity for the purchaser, including corporation, partnership, or limited liability company formation, organization, and capitalization
Out-of-Court Workouts
In addition to debtor-in-possession financing in the context of chapter 11 cases, the Firm has the capability to represent both lenders and borrowers in connection with out-of-court secured financing. Specifically, major interest cost savings can be achieved where out-of-court restructuring can assist a debtor with the refinancing the restructured indebtedness.
The SBRA targets relief for viable small businesses with temporary cash flow issues that restructuring can resolve. It streamlines the small business Chapter 11 process to make it faster and less expensive, and modifies key plan-approval requirements to improve the odds of a successful reorganization.
The Small Business Reorganization Act of 2019 (SBRA), effective February 2020, added Bankruptcy Code provisions making Chapter 11 faster and less expensive for small businesses. The CARES Act temporarily raised the Subchapter V debt ceiling to $7.5 million, but that expansion expired on June 21, 2024. The current limit is $3,424,000 of combined secured and unsecured debt, though pending bipartisan legislation (S. 3977, introduced March 2026) would restore the $7.5 million threshold. SBRA is aimed at viable small businesses with temporary cash flow issues that restructuring can resolve.
SBRA streamlines the small business Chapter 11 process and modifies key plan-approval requirements, making successful reorganization more attainable. Like traditional Chapter 11, it lets small businesses reorganize and re-emerge to grow again — with fewer requirements and lower cost.
Specialized Expertise in Subchapter V
Belvedere Legal, P.C. is uniquely positioned to handle small business Subchapter V cases. Larger firms carry overhead that creates an administrative burden too heavy for the fragile ecosystem of a viable small business with temporary cash flow issues. Belvedere Legal, P.C. specializes in these niche areas of Subchapter V.
- Eligibility cap. Only “small business debtors” engaged in commercial or business activities (other than primarily owning single-asset real estate) with aggregate non-contingent, liquidated debt at or below the statutory limit (currently $3,424,000) may elect Subchapter V.
- Subchapter V Trustee. A trustee is appointed in every case to facilitate plan negotiation and consensual reorganization. The trustee does not displace the debtor in possession, who continues to operate the business.
- No creditors’ committee (by default). Unlike traditional Chapter 11, no unsecured creditors’ committee is appointed unless the court orders one for cause — a major cost saving.
- Debtor-only plan. Only the debtor may file a plan of reorganization, and it must be filed within 90 days of the order for relief (extendable for circumstances beyond the debtor’s control). Creditors cannot propose a competing plan.
- No separate disclosure statement required. The plan itself must contain the disclosure-type information, eliminating the dual filing and approval process required in traditional Chapter 11.
- Cramdown without an impaired accepting class. A Subchapter V plan can be confirmed even if no class of creditors votes to accept it, provided the plan does not discriminate unfairly and is “fair and equitable” — a major departure from § 1129(a)(10) in standard Chapter 11.
- Modified absolute priority rule. Equity holders can retain their interests as long as the plan commits all projected disposable income for 3 to 5 years to plan payments. The traditional absolute priority rule does not apply.
- Discharge timing. In a non-consensual (cramdown) plan, discharge is deferred until the debtor completes plan payments (typically 3–5 years). In a consensual plan, discharge generally occurs on confirmation.
- Modification of principal residence mortgages. Subchapter V allows modification of a mortgage on the individual debtor’s principal residence if the underlying loan was used primarily in connection with the small business — a carve-out unavailable in traditional Chapter 11 or Chapter 13.
- Streamlined administrative requirements. Status conferences within 60 days, no quarterly U.S. Trustee fees, and reduced reporting obligations cut both time and cost.
- Cure of administrative expenses over time. Administrative expense claims (including § 503(b)(9) claims) may be paid through the plan over its term, rather than in full on the effective date — preserving cash at emergence.
Subchapter V of Chapter 11 is a streamlined reorganization process demanding expedited planning and prosecution of a small business reorganization plan within applicable statory deadlines. Belvedere Legal, P.C. brings extensive experience representing both companies and individuals in Subcahpter V of Chapter 11 and can provide efficacious representation.
Chapter 7 is the right path when reorganization isn’t possible or desired and liquidation is the best option, whether for individuals or companies. The debtor turns over all non-exempt assets to a court-appointed trustee, who liquidates them, resolves claims, and distributes proceeds to creditors according to the priorities set in the Bankruptcy Code. Individual debtors receive a discharge releasing them from most claims, with limited exceptions such as those involving fraud or embezzlement.
Practical Summary
| Individual | Company | |
|---|---|---|
| Discharge available | ✅ Yes | ❌ No |
| Exemptions | ✅ Yes | ❌ No |
| Means test | ✅ Required | ❌ Not applicable |
| Debtor survives | ✅ Yes | ❌ Entity winds down |
| Fresh start | ✅ Yes | ❌ N/A |
| Owner protection | Only their own filing | Must file separately |
Chapter 7 Bankruptcy — Companies vs. Individuals
The Fundamental Difference: Discharge
This is the most important distinction:
- Individuals — Can receive a discharge of remaining eligible debts after the trustee liquidates non-exempt assets. The individual walks away with a clean slate.
- Companies — Receive no discharge. A corporation or LLC that files Chapter 7 simply ceases to exist after liquidation. There’s no “fresh start” because a business entity doesn’t need one — it just winds down and dissolves.
Exemptions
- Individuals — Can claim exemptions (under California’s § 703 or § 704 scheme) to protect certain property from the trustee — homestead, vehicle, retirement accounts, tools of trade, etc.
- Companies — No exemptions available. The trustee liquidates all assets of the business estate. Everything goes to creditors in priority order.
Eligibility / Means Test
- Individuals — Must pass the means test under § 707(b) — if income is too high relative to median income, they may be forced into Chapter 13 instead
- Companies — The means test does not apply to businesses. Any corporation, LLC, or partnership can file Chapter 7 regardless of income level (subject to the § 303 eligibility rules for involuntary cases)
What Happens to the Debtor
- Individuals — The debtor continues to exist, cooperates with the trustee, and eventually receives a discharge order. Life goes on.
- Companies — The entity effectively ceases operating upon filing. The trustee takes control of all assets, liquidates them, distributes proceeds to creditors in statutory priority order, and the entity is wound down. Officers and directors lose control immediately.
Personal Liability of Owners
- Individuals — They are the debtor; their personal assets (minus exemptions) are at risk
- Companies — Filing Chapter 7 for the company does not automatically protect owners/shareholders from personal liability. If individuals personally guaranteed debts, those guarantees survive the company’s Chapter 7. Creditors can still pursue guarantors individually.
Priority of Distribution (Same for Both)
Both corporate and individual Chapter 7 estates distribute assets in the same statutory priority:
- Secured creditors (up to collateral value)
- Administrative expenses (trustee fees, professionals)
- Priority unsecured claims (taxes, employee wages up to cap, etc.)
- General unsecured creditors (pro rata)
- Equity holders (almost always receive nothing)
Automatic Stay
The automatic stay applies to both upon filing, halting collection actions, lawsuits, and foreclosures. However, for companies the stay is essentially just a tool to preserve assets during the wind-down — not a breathing spell to reorganize the way it might be for an individual.
Why Companies Use Chapter 7 vs. Assignment for Benefit of Creditors (ABC)
In California, many insolvent businesses opt for an Assignment for Benefit of Creditors instead of Chapter 7 because it’s faster, cheaper, and avoids the federal court process — though it lacks the automatic stay and trustee avoidance powers that Chapter 7 provides. For companies with significant fraudulent transfer or preference exposure to pursue, Chapter 7 with its trustee is often the better vehicle.
Chapter 12 is the right path when a family farmer or family fisherman with regular income wants to reorganize rather than liquidate, keeping the operation intact while repaying creditors over time. The debtor proposes a repayment plan, typically lasting three to five years, under which disposable income is paid to a court-appointed trustee who distributes the funds to creditors according to the priorities set in the Bankruptcy Code. Upon successful completion of the plan, the debtor receives a discharge releasing them from most remaining claims, with limited exceptions such as those involving fraud, certain taxes, or domestic support obligations.
Chapter 12’s standout features are its broad cramdown power (including on the principal residence — something neither Chapter 11 nor 13 can match as cleanly) and its design around seasonal income patterns, allowing farmers and fishermen to make payments tied to harvest/catch cycles rather than fixed monthly installments. It’s essentially a streamlined, lower-cost alternative to Chapter 11 for agricultural and fishing operations that would otherwise be priced out of reorganization.
Chapter 13 is the right path when an individual debtor with regular income wants to reorganize rather than liquidate, keeping assets while repaying creditors over time. The debtor proposes a repayment plan, typically lasting three to five years, under which disposable income is paid to a court-appointed trustee who distributes the funds to creditors according to the priorities set in the Bankruptcy Code. Upon successful completion of the plan, the debtor receives a discharge releasing them from most remaining claims, with limited exceptions such as those involving fraud, certain taxes, or domestic support obligations.
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At other times, we are called upon to represent concerned parents seeking to protect their children from a parent who has rejected his or her diagnosis or treatment plan—which can have a devastating impact on the family. We regularly address substance abuse issues as well, which often correlate to an underlying mental health issue. We have successfully requested and opposed requests for orders compelling random drug and alcohol testing.
We also frequently represent parents of children with special needs and are often called upon to establish parenting schedules that provide much-needed stability for the children and legal custody arrangements that ensure a parent will have the ability to obtain necessary services for their children without having to litigate every decision that needs to be made.
Nondischargeability Litigation
Section 523(a) leaves the discharge in place but excepts specific debts—such as those arising from fraud, fiduciary defalcation, willful and malicious injury, support obligations, most taxes, and most student loans—from its effect. By contrast, section 727(a) is used to deny a Chapter 7 debtor any discharge at all, typically based on the debtor’s misconduct in or around the bankruptcy case, leaving every prepetition debt intact.
Lawsuits to Except a Particular Debt from Discharge (11 U.SC.§ 523(a) et seq.)
Section 523(a) of the Bankruptcy Code carves out specific categories of debts that survive a debtor’s discharge. Unlike § 727, which can wipe out the discharge entirely, § 523 leaves the discharge intact but lets particular debts pass through unaffected, so the debtor remains personally liable on those debts after the case closes.
The exceptions fall into several broad groups. Some are automatic and require no lawsuit, including most priority taxes, domestic support obligations, most student loans (absent an undue hardship showing), criminal restitution and government fines, debts not listed in time for creditors to participate, certain DUI-related liabilities, condominium and homeowners’ association assessments accruing postpetition, and obligations arising from securities law violations. Others require the creditor to bring an adversary proceeding within 60 days of the first date set for the meeting of creditors, or the debt is discharged. Those litigated categories under § 523include debts obtained by fraud, false pretenses, or a materially false written financial statement under § 523(a)(2); fraud or defalcation while acting in a fiduciary capacity, embezzlement, or larceny under § 523(a)(4); and willful and malicious injury to a person or property under § 523(a)(6).
Belvedere Legal, P.C. has extensive experience defending debtors in adversary cases and prosecuting adversary cases on behalf of debtors and creditors.
Lawsuits to Deny of a Discharge of all a Debtor's Debts (11 U.SC.§ 727 (a)
A § 727(a) action is typically brought as an adversary proceeding by the trustee, the United States Trustee, or a creditor, and must usually be filed within 60 days after the first date set for the meeting of creditors. The statute lists several grounds, including that the debtor is not an individual (corporations and partnerships cannot receive a Chapter 7 discharge), fraudulent transfer or concealment of property within the year before filing, failure to keep adequate financial records, making a false oath or withholding records in the case, failure to explain a loss of assets, refusal to obey a court order or testify, having received a prior Chapter 7 discharge within the past eight years (or a Chapter 13 discharge within six years, subject to exceptions), and failure to complete the required financial management course.
This firm has successfully defended a Debtor in a §727(a). After trial, the Debtor received a discharge.
The Firm is as Adept in Nonbankruptcy Litigation as Bankruptcy Litigation. We represent plaintiffs and defendants in a multitude of state and federal court matters, including contract disputes, fraud actions, misappropriation of trade secrets, unfair competition, and unlawful business practices. We also have extensive experience bringing and defending motions for prejudgment remedies (e.g., receivership, attachment, claim, and delivery). At the outset of any engagement, we thoroughly evaluate options with a client to decide how best to apply its resources, whether it be aggressive litigation or creative settlement strategies. We also help employers navigate the complex world of employment law in both the plaintiff and defense sides
At Belvedere Legal, our briefs have a tone that is well-researched and credible, yet also pragmatic, incisive and never rote.
To be effective, appellate lawyers must:
- Work fruitfully and cooperatively with trial counsel
- Craft jury instructions and post-trial motions that preserve the issues for possible appeal
- Reframe the issues to maximum advantage
- Tell a compelling story within the constraints of the applicable standard of review
- Bolster doctrinal arguments with arguments about public policy and legislative intent
- Challenge a ruling, not the judge who issued it
- Know when to defend the trial court’s reasoning and when to suggest a simpler route to the same result
- Write a brief that blends emotion and reason without sounding like a jury argument
- Write clean, spare prose that says just enough
- We honed these skills through over a decade of legal, written advocacy.
Bankruptcy Appeals
The firm has experience with appeals to the District Court and the Ninth Circuit Court of Appeal.
Bankruptcy appeals can be a procedurally complex area of the law. Unlike nonbankruptcy litigation, there is a great variety of orders in bankruptcy cases that may be subject to immediate appeal. There may also be a choice of appellate forum, i.e. the District Court, or the Ninth Circuit Bankruptcy Appeals Panel.
Further, in many cases, appellate rights may be lost not just by failure to appeal within the appropriate time, but also by failure to take action to prevent an appeal from being dismissed as moot, which can happen with financing or sale orders.
The firm has experience with appeals to the District Court and the Ninth Circuit Court of Appeal.
In bankruptcy, there is a fork in the road between “reorganization” chapters and “liquidation” chapters. The following chart is a useful comparison summary of bankruptcy chapters.
|
Chapter 7 Liquidation |
Chapter 11 Reorganization |
Chapter 12 Family farmer/fisher |
Chapter 13 Wage earner plan |
|
|
Who can file |
Individuals & businesses |
Individuals & businesses |
Family farmers & fishermen only |
Individuals with regular income only |
|
Debt limits |
None |
None |
None (no cap) |
Unsecured $526,700 Secured $1,580,125 |
|
Income requirement |
Means test required |
None |
Regular annual income from farming/fishing |
Regular income required |
|
Discharge available |
✓ Yes (individuals) |
✓ Yes (after plan) |
✓ Yes (after plan payments) |
✓ Yes (after plan payments) |
|
Plan required |
✗ No |
✓ Yes |
✓ Yes (3–5 years) |
✓ Yes (3–5 years) |
|
Plan length |
N/A |
Varies (no fixed term) |
3 years (up to 5 for cause) |
3–5 years |
|
Trustee role |
Takes control, liquidates assets |
DIP retains control (or trustee appointed). In Subchapter V, a Subchapter V trustee works with the debtor and creditors. |
Standing trustee; debtor remains in possession |
Standing trustee distributes payments |
|
Exemptions |
✓ Yes |
Limited |
✓ Yes |
✓ Yes |
|
Lien stripping / cramdown |
Limited |
✓ Yes |
✓ Yes — very broad Including on principal residence |
Limited (no primary home) |
|
Key advantage |
Fast, clean exit |
Flexibility, business continuity |
Tailored for seasonal income; broad cramdown; lower cost than Ch. 11 |
Keep assets, repay over time |
|
Key limitation |
No discharge for businesses; no exemptions for entities |
Expensive, complex, slow |
Farmers/fishermen only; income must be from that source |
Debt caps exclude high-debt debtors |
|
Creditors’ committee |
✗ No |
✓ Possible, especially in larger cases. |
✗ No |
✗ No |
|
Involuntary filing allowed |
✓ Yes |
✓ Yes |
✗ No |
✗ No |
